Trump signs order to move controversial oil pipelines forward

Trump signs order to move controversial oil pipelines forward


WASHINGTON (Reuters) - U.S. President Donald Trump signed two executive orders on Tuesday to move forward with construction of the controversial Keystone XL and Dakota Access oil pipelines, rolling back key Obama administration environmental policies in favor of expanding energy infrastructure.

While oil producers in Canada and North Dakota are expected to benefit from a quicker route for crude oil to U.S. Gulf Coast refiners, a revival of the projects would mark a bitter defeat for Native American tribes and climate activists, who vowed to fight the decisions through legal action.

Trump campaigned on promises to increase domestic energy production and before taking office indicated he supported completion of the Dakota pipeline and re-starting the C$8 billion ($6.1 billion) Keystone XL project, which was rejected in 2015 by then-President Barack Obama.

Protesters had rallied for months against plans to route the $3.8 billion Dakota Access Pipeline beneath a lake near the Standing Rock Sioux reservation, saying it threatened water resources and sacred Native American sites.

It is not yet clear how exactly the orders will move the projects forward.

In a statement, the Standing Rock Sioux said they would fight the decision.

"Americans know this pipeline was unfairly rerouted towards our nation and without our consent. The existing pipeline route risks infringing on our treaty rights, contaminating our water and the water of 17 million Americans downstream," said Dave Archambault II, chairman of the Standing Rock tribe.

The North Dakota Petroleum Council, the trade group for the state's oil producers who are relying on Dakota Access to expand their crude transport options, cheered Trump's order.

"We think this is a great step forward for energy security in America," said Ron Ness, the council's president.

The more than 800,000 bpd Keystone XL pipeline linking Canada's oil sands to the U.S. Gulf Coast was conceived nearly a decade ago. Since then, however, the U.S. shale revolution has redefined oil flows, with domestic refiners suddenly finding themselves awash with plentiful supply and needing fewer foreign imports.

Canadian Natural Resources Minister Jim Carr said in Calgary that TransCanada Corp's Keystone XL has all the regulatory approvals it needs in Canada, and that the project would be "very positive for Canada."

Environmental activists broadly opposed the Keystone XL pipeline and campaigned against it for more than seven years, eventually winning a victory when Obama rejected the project in 2015.

"President Trump appears to be ignoring the law, public sentiment and ethical considerations with this executive order aimed at resurrecting the long-rejected Keystone XL pipeline and circumventing the ongoing environmental review process for the highly controversial Dakota Access pipeline," Trip Van Noppen, president of nonprofit environmental law organization Earthjustice said in a statement.

TransCanada shares last traded up 2.6 percent on the Toronto Stock Exchange. The company did not immediately respond to a request for comment on Tuesday.

The U.S. Army Corps of Engineers in January said it would begin an environmental assessment that could delay the Dakota project further. It is not clear if Trump’s order supersedes that move, and the Standing Rock statement suggested the order circumvents the environmental review.

The tribe won a key victory when the U.S. Army Corps of Engineers in early December turned down Energy Transfer Partners' request for an easement to tunnel under the nearby Missouri River.

Most of the 1,172-mile (1,885 km) Dakota pipeline was completed by the summer of 2016, except for a small section under Lake Oahe, a reservoir that forms part of the river.

Trump on Monday met with leaders of labor unions, including the Building and Construction trades group and the Laborers International Union of North America, who have been vocal supporters of both pipeline projects.

Both groups had endorsed Trump rival Hillary Clinton in the 2016 U.S. election, but disagreed with her opposition to the Keystone pipeline.

In a statement on Tuesday, the U.S. Teamsters Union noted that the pipelines would "put thousands of Americans" to work.

Trump, speaking on Tuesday in Washington, said Keystone XL would create 28,000 jobs, but that figure is at odds with a 2014 U.S. State Department environmental study, which said the project would create 3,900 U.S. construction jobs and 35 permanent jobs.

Shares of ETP, the company building the 450,000 barrel-a-day Dakota pipeline, were up 3.7 percent in U.S. trading.

Trump owned ETP stock through at least mid-2016, according to financial disclosure forms, and ETP's chief executive, Kelcy Warren, donated $100,000 to his campaign. U.S. Energy Secretary nominee Rick Perry was until recently on ETP's board.

Graphic of proposed Dakota Access pipeline here -

(Reporting by Steve Holland and Valerie Volcovici in Washington, Ethan Lou in Calgary, Ernest Scheyder in Houston and writing by Catherine Ngai in New York; Editing by Savio D'Souza and Meredith Mazzilli)